Compound interest is the engine behind every long-term investment plan: your returns start earning returns of their own, and over a couple of decades that snowball does most of the heavy lifting. This calculator projects an investment forward in euros, with monthly contributions and an optional after-tax view, so you can see what a regular investing habit actually grows into.
Compound Interest Calculator
How to Use This Calculator
Enter your starting amount, what you plan to add each month, how long you’ll stay invested, and the annual return you expect. The result updates as you type. A few notes on the inputs:
- Annual return rate: for a globally diversified stock portfolio, a long-run figure of 5% to 8% is a reasonable planning range. Be conservative rather than optimistic.
- Compounding frequency: monthly is the realistic default for an investment account where contributions go in every month. Annually is a simpler approximation.
- Effective tax on gains: leave this at 0% to see the pre-tax figure, or enter your local rate to see what you’d keep after tax on the growth. There’s more on European rates below.
What the Result Tells You
The headline number is the projected future value of the account. Below it, the split between what you contributed and what compounding added is the part worth sitting with: over a long horizon, the growth portion usually dwarfs your contributions. The after-tax value applies your tax rate to the growth only, since your contributions were already taxed income.
The Compound Interest Math
With a lump sum and no further contributions, the formula is the classic one:
FV = P × (1 + r)n
where P is the principal, r is the periodic return, and n is the number of periods. Once you add regular monthly contributions, each contribution compounds for a different length of time, so this calculator runs the month-by-month accumulation rather than a single formula. That’s also what lets it show the year-by-year chart.
Common Scenarios
- The steady saver: €0 to start, €500 a month, 7% for 30 years grows to roughly €590,000, of which only €180,000 is contributions. Time does the rest.
- The late starter: the same €500 a month at 7% over 15 years instead of 30 reaches about €158,000. Half the time, far less than half the result, that’s compounding working against you when you delay.
- The lump sum: €50,000 invested once at 6% with no additions becomes about €287,000 over 30 years, purely from growth.
Tax Considerations in Europe
This is where European investors get tripped up by US-based calculators, which often assume tax-sheltered accounts like a 401(k) or Roth IRA that don’t exist here. In most of Europe, gains in an ordinary brokerage account are taxed when you sell. Rates vary widely: Spain taxes savings income on a band from 19% up to 30%, Germany applies a flat rate of roughly 26.4% with an annual allowance, Belgium has historically taxed capital gains lightly or not at all, and several countries offer specific tax-advantaged wrappers. Put your own effective rate in the tax field to see a realistic after-tax figure, and check the rules where you actually file.
What This Calculator Doesn’t Model
- Inflation. The figures are nominal. To think in today’s money, use a lower “real” return (subtract roughly 2% for long-run inflation).
- Fees. Fund and platform costs reduce your effective return. Subtract them from the return rate you enter.
- Sequence of returns. Markets don’t deliver a smooth annual rate; the order of good and bad years matters, especially near the end.
- Tax-on-sale timing. The after-tax view is a simplification; real tax depends on when and how you realize gains.
Next Steps
If the numbers make the case for starting (or adding more) sooner, my beginner’s guide to investing covers how to actually put this into practice in Europe, from picking a broker to choosing what to buy. To go further, try the FIRE calculator to see when this could fund financial independence, or the dividend calculator if you’re building toward passive income.
